Business

Tue May 27 02:57:14 PDT 2008

(Adds details, background)

By Edwina Gibbs

TOKYO, May 27 (Reuters) – U.S. biotech firm Alnylam Pharmaceuticals Inc, which is developing a promising drug discovery technology known as RNAi, said it has formed an alliance with Japan’s Takeda Pharmaceutical Co Ltd — another major deal after one with Roche AG last year.

Takeda will hand over $100 million in upfront payments and $50 million in near-term technology payments, and the deal is valued at potentially up to $1 billion in future research and development and commercial milestones.

It covers potential RNAi treatments in cancer and metabolic disease, with the option to expand to other therapeutic areas.

"What’s important is that in addition to enabling Takeda, Alnylam has access to develop and co-commercialise RNAi therapeutic products that Takeda develops from this collaboration," Barry Greene, Alnylam’s chief operating officer said in an interview on Tuesday.

"So ultimately we have significant product rights in the U.S. market," he said.

RNAi, or RNA interference, is one of hottest areas of biotechnology research and has attracted investment from many big drugmakers. The technology is designed to silence genes responsible for producing disease-causing proteins.

Alnylam will have options to co-develop and co-market future Takeda RNAi products in the U.S. market on a 50-50 basis.

Takeda will become Alnylam’s strategic partner for five years and will be the only Asian company to obtain first right of negotiation for RNAi programmes for the Asian market.

This will not include Alnylam’s most advanced product for respiratory syncytial virus (RSV) infection, however.

Last year Swiss drugmaker Roche Holding AG also signed a deal with Alnylam worth up to $1 billion, with an upfront payment of $331 million in cash and equity investment.

Alnylam, based in Cambridge, Massachusetts, also has a major partnership with Swiss drugmaker Novartis AG, which has a 20 percent stake in it. In addition it has agreements in place with biotechnology company Biogen Idec Inc. and medical device maker Medtronic Inc

It used to also have one with Merck & Co. but the partnership ended after Merck bought Sirna Therapeutics Inc, a rival developer of RNAi technology.

Takeda, facing the expiry of its main earnings driver, diabetes drug Actos, in 2011, has been spending big to strengthen its pipeline.

It recently completed an $8 billion-plus purchase of Millennium Pharmaceuticals, a specialist in cancer treatments and one of the few profitable U.S. biotech firms.

Shares of Takeda closed up 2.8 percent at 5,930 yen ahead of the announcement.

(Additional reporting by Mariko Katsumura, Editing by Michael Watson)

Provided by Reuters

© Reuters 2008 All rights reserved